My the grains were steeped for 30 min and boil time was 60 mins.
The recipe said to primary ferment for 1 week then transfer to 2nd frementer, add crystal hops and lager for 2 weeks.
My wort was cooled to about 60 F using a wort cooler in about 15 mins. I pitched the yeast at this temp. I followed the instructions on the side of the vial to bring the yeast out of the fridge 3 hours per and shake it up as it came to room temp though I did not make up a starter the day before as I was told White Lab yeasts are pitchable right from the vial. My wort was aerated through shaking before pitching yeast. Original gravity : 1.051

My fermenter is in a mini fridge set to 50 F and it has held a temperature in the range of 51-53 F. White labs web site confirms that the optimum working temp for this strain is 50 -55 F.

After a week I wasn't noticing much activity even though there was a decent yeast bed but I was told that lagers ferment at a slower speed so I took a SG reading and it was unchanged (1.051) so I shook up the fermenter and left it to be. After two weeks I took a second reading after transferring it into the 2nd fermenter and it has gone up to 1.060.

So what's up with my brew?

Did I just get a batch of yeast that was off?
Did bacteria get in?

Also for future reference what would be the best way (recipe) to make a starter for Lager yeast?
Also should said starter be stored in a fridge or be kept at room temp?

Welcome to the world of lagers. First rule...everything on lagers just takes longer. Additionally since the wort is cooler during the ferment, it holds more CO2, therefore you get seemingly less airlock activity. If you have a nice yeast bed then I'd say they were having a party in your fermenter. I've also learned to let the yeast tell you when they're done. As a rule, I'll leave the wort on the primary yeast bed for about one month to make sure they're done. Afterwards I keg the beer and lager at 32F for at least another month.

I'm curious...did you do a full boil or a partial boil? If you topped off with water in the fermenter, it's possible your wort was stratified and you weren't getting a good reading. With the amount of fermentables you had in there your OG should've been between 1.061 and 1.068 (I'm not sure what your final volume was). Also (I know stupid question) did you adjust the hydrometer reading for temperature? You may want to bring the beer up to 60F and rouse the yeast, then when you see some activity bring it back down to 55F slowly.

To make a lager starter, procedurally make it the same way you make an ale starter. As far as what temperature to use, that depends on what you want to do with the liquid in the starter. If you plan on using the entire starter without decanting, then I'd suggest fermenting your starter at the same temp you'll do your beer this way you minimize fusel production, etc. If you're going to decant, then fermenting at room temp is ok. In the end, whatever procedure works best for you. As with anything in homebrewing, there are many different approaches and not one is more right than another.